Al Gore: A message for Indonesian students?

Al Gore: A message for Indonesian students?

By David DeRosa

NEW YORK (Bloomberg): Vice President Al Gore's controversial Kuala Lumpur speech last week on democracy and political freedom has Malaysia's powers that be doing back flips.

The latest reaction was from Prime Minister Mahathir Mohamad who summoned the U.S. ambassador Monday to give him a piece of his mind. One by one, Malaysians loyal to Mahathir have lined up to express their revulsion at Gore's remarks.

It wasn't just Malaysian officials who took offense. Take Richard Holwill, director of international affairs for direct seller Amway Corp., who said Nov. 17, "The American business community wishes, I believe, to apologize for the very poor manners of the vice president." Well, who elected Amway to speak for the American business community?

Some other business leaders were quick to jump on Gore. We were "mortified" said Kate Clemens, a spokeswoman for the U.S.- ASEAN Business Council, whose members include General Electric Co. and American International Group.

Meanwhile, all this leaves investors with an even more clouded picture of Asia. Political risk now dominates financial risk, as in the case of Indonesia. Malaysia may be the next place for a revolution if anything further untoward happens to former Deputy Prime Minister Anwar Ibrahim, Mahathir's jailed political rival.

Put away the small, self-interested reactions and fake outrage. Something quite remarkable has happened. For decades, the U.S. has been taken to task for supporting third-world totalitarian regimes for purposes of political expediency.

Actually, the American record is mixed. The U.S. supported the late Philippine dictator Ferdinand Marcos for many years but then engineered his removal in favor of democracy.

The same thing happened with ex-dictator Manuel Noriega, who former U.S. President Jimmy Carter accused of stealing a Panamanian presidential election. Noriega is now incarcerated in the U.S. following his 1992 conviction for drug trafficking.

The U.S. has certainly given convenient support from time to time for friendly dictators but there are a great many cases where it called for and supported democratic freedom movements.

So Gore's remarkable speech isn't really so much a change of course as it is a declaration of renewal of American commitment. It was a good speech -- maybe the best of his lifetime. It took courage to deliver it right into Mahathir's face.

In a way, the speech was in the style of John F. Kennedy, although it falls a little short of the ringing words of JFK's inaugural address: "Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, to assure the survival and success of liberty."

The question is what does Gore's speech tell the rest of Asia, Indonesia in particular. The most famous line of the address is: "We continue to hear calls for democracy, calls for `reformasi.' We hear them today -- right here, right now -- among the brave people of Malaysia."

As a matter of fact, Indonesia, the fourth-most populous country in the world, is literally imploding under political and economic pressure. Students are rioting in the streets and the army is killing them. And what do the demonstrators want? They are demanding a free, democratic election. They want President B.J. Habibie, the appointed successor of former President Soeharto (and his adopted son), to step down.

The Indonesians also want Soeharto investigated for abuses of power in the course of his 32-year term as president.

The government is showing some signs of cracking. Two of Soeharto's children are under investigation. His son Tommy can't leave the country and daughter Tutut is being questioned on suspicion of corruption. It seems she personally owned a considerable portion of the national toll-highway system. The trump card is the old man himself. You'll know Habibie is really feeling the heat if he hands Soeharto over for prosecution.

That leads me back to Gore's speech. Noble sentiments are fine though they don't mean anything unless backed up by action. If the Clinton administration is really supportive of the reformasi movement, then what is it doing voting for massive aid for Indonesia from the International Monetary Fund? How can Gore maintain we are with the reformasi when we are propping up Habibie with billions of dollars of IMF bailout money?

The writer is president of DeRosa Research and Trading and an Adjunct Finance Professor at Yale School of Management. The opinions expressed here are his own and don't necessarily represent the judgment of Bloomberg LP or Bloomberg News.